Pakistan’s new diplomatic momentum: Ishaq Dar’…

The global semiconductor industry is on track to surpass $1 trillion in annual revenue in 2026, driven largely by the rapid expansion of artificial intelligence infrastructure. AI-related chips are reshaping the semiconductor business. Although advanced AI processors represent only a tiny share of total chip shipments, they are expected to generate almost half of the industry’s overall revenue this year. The surge reflects the enormous investment being made in AI data centres around the world. The five largest global technology hyperscalers have allocated more than $600 billion to AI data-centre infrastructure in 2026. The growing demand is also increasing the importance of advanced chip manufacturing. Producing a sophisticated 3-nanometre processor can take around six months, highlighting the complexity and limited capacity of the global supply chain. Taiwan Semiconductor Manufacturing Company (TSMC) remains central to the production of the world’s most advanced processors. The company manufactures an estimated 90% of the most sophisticated chips, making it a critical supplier for the rapidly expanding AI industry. This concentration has also raised concerns about supply-chain vulnerability. Any major disruption to advanced chip production could affect technology companies, AI developers and governments that are investing heavily in artificial intelligence. Nvidia has emerged as one of the biggest beneficiaries of the AI boom. The company reported revenue of $215.9 billion, strengthening its position as a leading supplier of processors used to train and operate advanced AI models. The chip industry’s challenges extend beyond processors. High-bandwidth memory (HBM), which is essential for AI computing, has become another major supply constraint. Much of the available HBM production capacity is already committed through 2026. The global memory market is also expected to generate substantial revenue, with estimates putting fiscal 2026 revenue at around $594.7 billion. The figures underline how quickly AI is transforming the global semiconductor industry. Demand is shifting toward fewer but far more valuable advanced chips, while manufacturers face pressure to expand capacity and secure critical components. As AI investment continues to grow, semiconductor production is increasingly becoming a strategic issue for technology companies and governments. The ability to manufacture advanced processors and memory at scale could determine how quickly the next phase of AI development progresses.

Saudi Arabia’s oil exports to Asia are facing fresh uncertainty after Yemen’s Houthi movement announced a blockade targeting Saudi ports in the Red Sea, raising fears of major disruptions to global energy supplies and higher oil prices. The impact became evident after two oil tankers carrying nearly 2.8 million barrels of Saudi crude reversed course in the Red Sea instead of continuing through the Bab al-Mandeb Strait. The vessels had departed from the Saudi port of Yanbu and were originally bound for Asian markets. The latest development has created concerns over the security of Saudi Arabia’s alternative export route. For months, the kingdom relied heavily on its Red Sea pipeline network and Yanbu terminal to bypass disruptions in the Strait of Hormuz, where regional tensions have significantly reduced shipping traffic. With Bab al-Mandeb now under threat, Saudi Arabia’s backup route is also facing serious challenges. Energy analysts warn that this could restrict oil exports, tighten global supplies and increase pressure on international crude prices. Asian countries are expected to suffer the greatest impact because they depend heavily on Middle Eastern oil. Around six million barrels of crude oil pass through Bab al-Mandeb every day on their way to Asian markets, with Saudi Arabia accounting for nearly two-thirds of that volume. India is considered the most vulnerable, as more than half of its crude oil imports travel through the Red Sea route. Pakistan is also among the affected countries, with around 36 percent of its crude imports passing through Bab al-Mandeb. Other major importers exposed to disruptions include the Philippines, South Korea, Japan, Taiwan and China. To avoid conflict zones, shipping companies are evaluating a much longer route through Egypt’s Suez Canal, the Mediterranean Sea and around Africa’s Cape of Good Hope before heading towards Asia. Although this route bypasses both the Strait of Hormuz and Bab al-Mandeb, it comes with significant drawbacks. The journey could take more than twice as long, extending delivery times by several weeks. Longer voyages would also increase fuel consumption, insurance costs and freight charges, making crude oil more expensive for buyers. Logistical challenges further complicate the situation. Most Saudi crude from Yanbu is transported on Very Large Crude Carriers (VLCCs), which are too large to pass through the Suez Canal when fully loaded. Operators would need to either transfer part of the cargo through Egypt’s SUMED pipeline or use smaller tankers, both of which would add time and operational costs. Energy experts believe these limitations could reduce Saudi Arabia’s export capacity even if alternative shipping routes remain available. Some refiners in Asia have already started preparing for longer supply routes, while shipping companies are adjusting vessel schedules in anticipation of prolonged disruptions. Analysts also warn that if instability continues in both the Strait of Hormuz and Bab al-Mandeb, the consequences could extend beyond shipping. Higher transportation costs, tighter crude supplies and increased demand for oil tankers could push global oil prices above the $100-per-barrel mark. Alternative supplies from countries such as Russia, the United States and Venezuela may help ease shortages, but those options are limited by production constraints, longer shipping distances and higher transportation expenses.